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Although the fourth quarter was mainly dominated by the message that public support for NGOs is declining in almost every area, the period also included a few other things, not all of them negative.
We made a proposal to the state in the framework of the Donation Initiative: the Estonian tax environment could finally be more donation-friendly. We’ve made two proposals:
- Establish a separate tax credit threshold for individual donors, independent of other tax benefits (e.g. mortgage interest or school fees);
- A reform of the taxation of corporate donations that would: a) abolish tax deductibility thresholds for donations altogether, b) increase the existing thresholds, for example to 25% of the previous financial year’s profits or 10% of the payroll for the same year, c) introduce a new tax-free donation option that would allow donations of up to 10% of undistributed profits.
So far, we have received feedback on the proposal from the Ministry of Culture, which shares our views and will consider them when drafting its proposals to the Government, but will initially carry out analyses with the Ministry of the Interior before taking concrete steps. In any case, we plan to take concrete steps in the future: in addition to waiting for feedback from the other ministries, we plan to increase our cooperation with businesses willing to work together to promote charitable donations. We also want to strengthen our advocacy work on donations in 2025, so that this long-standing issue finally starts to change. If you are passionate about donation and feel you could be of use to the advocacy work on donation, let us know!
The Riigikogu has passed a law changing the threshold for the obligation to audit foundations. Whereas previously an audit had to be mandatory for foundations with a turnover of €15 000, whereas from now on the turnover must reach €1 million. The change will not affect those who have chosen to carry out regular audit within their foundation, but will bring relief to those for whom the inspection obligation has been a tedious chore, let alone finding an auditor. The law will enter into force retrospectively, i.e. it will already apply to annual accounts for 2024. The exact wording in the amended Auditor Activities Act:
§ 92. Obligation of audit
(21) An inspection of the annual accounts shall be mandatory for foundations other than those referred to in subsection (4) of § 91 of this Act, whose annual accounts include at least one of the following indicators:
1) sales revenue or income of EUR 1 000 000;
[RT I, 07.01.2025, 1 – entered into force on 17.01.2025] [RT I, 07.01.2025, 1 – entered into force on 17.01.2025]
(1) the total amount of the assets at the balance sheet date is EUR 1 000 000.
At the end of October, ARVAK met, and in November, the Open Governance Partnership (OGP) round table took place. The country is in the process of planning the new period of the Open Government Action Plan, in which NGOs are also involved through the OGP Roundtable. The current period of the Action Plan has ended at a point where civil society cannot be too satisfied, so we are working actively to ensure that the unfinished business from the previous Action Plan (e.g. co-creation environment) is moved forward and that the new Action Plan is formulated in a way that allows real progress to be made on open government. The next meeting of the OGP Roundtable is expected to take place in February. If you are interested in open government issues but your association is not yet part of the OGP Roundtable, please contact marcus@heakodanik.ee.
In November, the European Commission asked for input from a wide range of areas and sectors of life, including NGOs, for the drafting of the Estonian National Report. Thank you to everyone who provided feedback for the national report! Year on year, the report reflects similar themes, with the livelihoods of people, environmental concerns, concerns about data availability and transparency continuing to feature in the discussions. What was surprising at times was how much of the EU funds allocated to Estonia are implemented by the state itself and how the share reaching civil society is very marginal and linked to specific programmes (e.g. ACF).
The advocacy network also met in November. Maarja-Leena Saar from the Estonian Cooperation Assembly spoke about the practice and impact of the People’s Initiative collective petitions over 10 years. Teele Pehk and Maiu Lauring from the Centre for Democracy gave an overview of the People’s Assembly as a possible method of advocacy. In addition, we set the network’s objectives – in 2025, the network’s attention will be needed to address different crises; inclusion, open governance and strategic partnerships; sharing international practices and different advocacy tactics within the network.
In December, Marcus hosted a delegation of state and civil society from Armenia, on the theme of cooperation between state and civil society in policymaking and service delegation.
We analysed data on ministries’ money distribution practices for the shadow report on funding, supported associations with their problems under company law and participated in psychological protection courses organised by the Chancellery.
A year of cuts ahead. We are aware of the dissatisfaction of associations with both the cuts and the pace of grant allocations. We see our role first and foremost as an active partner in providing solutions and support to better communicate the expectations of the voluntary sector to the ministries, which we did on several occasions during the last quarter. We will ensure that strategic partnership practices are maintained and that the consequences of delays are addressed more seriously. If you have any suggestions on how we can play this role even better, please let us know!
We wish you a successful year of advocacy implementation!
If you have any thoughts on what could be done better, or not done at all, please email marcus@heakodanik.ee.
